vassvdm's entrepreneurial adventure

The People-to-Work Ratio

I was watching an old talk by Marissa Mayer the other day. She talked about her career at Google (this was before she became the CEO of Yahoo). She said a lot of interesting things, but a few days later I only remember a couple. It’s funny how the mind works; the little details that stick out tend not to be their author’s main message, but maybe a useful little insight or a revealing turn of phrase.

At one point Marissa Mayer mentioned that one aspect of working at Google that she enjoyed is the fact that there is more work than people. No matter how many employees Google hires, the challenges they take on are so numerous and so broad that everyone will always be overloaded with work.

I’m not sure how much this still applies to today’s Google, but for many years the company retained a structure akin to a conglomerate of start-ups, with small and autonomous engineering teams tackling big problems and the ‘20% time’ policy to encourage employees to implement their own ideas. The general idea is not to throw more people at problems. To keep a lot of people productive and motivated it’s best to divide them into small groups and give each one their own product to make and their own market to address. I’m sure that as it grows Google is starting to see more politics and bureaucracy but I’d wager that it is nowhere near as bad as other companies with a similarly large payroll.

Like Google during its infancy, start-ups are small and don’t have a lot of means. Each person is perpetually in the situation of having too much work and needing to choose where their efforts should be focused. Start-ups are unburdened by politics, long meetings and, for the most part, slow decision-making. While this puts pressure on each individual, it also enables more freedom and less people-related stress. And a lot more gets done in the process.

I’ve worked at large government entities and a large bank. In those places, the people-to-work ratio is much higher. The bank alone has five times as many employees as Google, but its ambitions are markedly lower. That’s not to say that there is little work to do, but the projects that receive funding and recognition from top management are few in number, so everyone ends up fighting for a small piece of the same pie. Failure to be part of one of these key activities leads to fewer chances of advancement and greater risk of losing your job. Decisions are taken by committee, and failing to invite someone who sees himself as a key stakeholder to a review meeting will earn you a figurative slap in the face. This in turn makes people more interested in covering their behinds and hiding behind bureaucracy than focusing on innovation, gradually turning bright and ambitious people into pointy-haired managers.

Even the (large) consulting company I was working for at the time, although much more nimble and efficient than these organizations, was afflicted by an unfavorable people-to-work ratio. To move up in the company, you needed to get credit for a large project. Since large projects were rare, every executive would try to get a foothold on a big one in some way. That’s not to say that the company was paralyzed by politics and infighting. Many teams were focused on doing great work, but much of what they did wasn’t valued by the company’s stack ranking assessment system.

Many freelancers work at large bureaucratic companies, and in some ways they are the saviors of this flawed operating model. Freelancers are outsiders who need to keep justifying their rate by doing quality work every day. They aren’t looking for a career at the company so they aren’t interested in politics. I’ve seen entire departments that were effectively run by contractors. But even their intrinsic motivation falters if they are forced to contend with politics and bureaucracy on a regular basis.

Many freelancers will still prefer working in an environment where they are the only ones who are getting anything done. This has to do with job security and higher rates, which are easier to find if you work for one large client instead of several smaller ones. But these jobs are in short supply. The others need to find clients the hard way. Elance/oDesk and similar sites feature quite a high freelancer-to-work ratio – real or perceived – as applying for a gig means going up against dozens of other freelancers around the world and competing on price. That’s why most freelancers prefer to find work by other means –via referrals or their own website. Clients who seek out a specific freelancer are much more likely to have a lower people-to-work ratio.

I wonder whether the world of work will forever be divided in this way or whether the overall people-to-work ratio will decline in years to come. In any case I’ve made my mind up about which type of organization I’m interested in working for.